1. Employers are embracing new ways of finding the skills they need.
Investment in workforce development remains a top priority, especially as skills gaps for technical and knowledge-based work widen due to an uptick in large-scale transformation initiatives. More than 80% of businesses are currently planning to increase overall investment in workforce development in 2024.
The lingering labor market imbalance is causing employers to embrace new ways of finding the skills they need. Nearly one in five businesses (18%) are planning to increase investment in outside talent this year, including consultants, independent contractors, and staffing firms. This is only slightly behind the level of investment that organizations plan to make in internal headcount (22%). One in three businesses (37%) are planning to increase investment in reskilling and upskilling current employees.
2. A lower interest rate environment may unlock tech investments.
While the Fed signaled that it’s unlikely to see interest rate cuts in March, Chair Jerome Powell remains confident that the Fed is on track to cut interest rates three times in 2024.
What areas of operation would organizations prioritize if a lower interest rate environment were to unlock new capital? More than half of respondents (58%) said they would invest new capital in digital transformation and AI. Many financial decision-makers also said they would prioritize business process optimization (BPO) and automation, and enterprise resource planning (ERP) and other migrations.
3. New capital would unlock further investment in workforce strategy.
While organizations are already planning to increase workforce spend this year, interest rate cuts could accelerate this investment further. More than half of financial decision-makers (53%) said they would invest new capital in balancing full-time headcount with outside talent and 53% also said they would invest new capital in upskilling or reskilling current employees. More than one-third (36%) said they would invest in full-time headcount.
4. AI is having an impact on workforce development.
Nearly half of financial decision-makers (45%) said their organizations experienced a skills gap in AI and automation in the past year while another 42% said their finance function is currently facing a skills gap in these areas. Other cited skills gaps included soft skills (31%), project management (31%) and data management (31%).
The growing urgency to better leverage AI and automation may also have the biggest impact on workforce development moving forward. Half of respondents cited this as the factor that could have the biggest impact on their organization’s investment in workforce development over the next 12 months. Other factors cited included hiring challenges in a tightening labor market (45%) and widening skills gaps (37%).
5. The finance function continues to evolve.
The role of the CFO and the responsibilities of the finance function continue to evolve amid the rise of digital transformation and the emergence of AI and automation. More than 40% of financial decision-makers said they worked more closely with their organization’s IT department over the previous 12 months. Many expect to take on more tech responsibilities in the next year, with half of respondents (54%) saying they expect to take on more technology migration/implementation responsibilities.
Our previous research also revealed that CFOs and CHROs are working more closely with CEOs to re-evaluate their talent strategies to determine where they need injections of outside expertise.
More than one in three financial decision-makers polled (35%) said they have worked more closely with their organization’s executive leadership and C-suite in the past year, and nearly one-third (32%) said they have worked more closely with their organization’s HR department. On an organizational level, more than half of respondents (52%) said that collaboration between their company’s finance function and HR team has increased over the past year.
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